Boeing shares work, but guards its secrets

The Seattle Times ^ | May 15, 2007 | Dominick Gates

[Paul Ross]

Three Japanese industrial giants build and co-design 35 percent of the 787. They deliver most of the 787's center section and are now manufacturing the massive composite plastic pieces in Nagoya, two hours southwest of Tokyo by bullet train.

The Japanese government provides loans to finance the development project estimated at up to $2 billion.

[Paul Ross]

One of the more telling segments therein:

Princeton University economist Alan Blinder sees a growing pattern of outsourcing of surprisingly high-level work through such electronic means.

"There's no relationship at all between vulnerability to offshoring and skill level," Blinder said. "What makes it offshorable is whether the service can be delivered over a long distance electronically."

He estimates 30 million to 40 million U.S. jobs could be lost over the next two decades through Boeing-style communication technology. Old-school Boeing engineer Sutter acknowledges the local impact of losing the detailed design work.

"The big loss is you are going to be shrinking your labor force here," he said. "The young start-up engineers, there's less of them required. Yes, jobs are disappearing."

[Spktyr]

Kill the unions, pass meaningful tort reform and watch the jobs come back because the cost of doing business in the US will drop like a rock.

[Paul Ross]

Pictures help show the process:

Mike Siegel, Seattle Times

Workers examine a wing-skin section at the Mitsubishi plant in Nagoya, Japan. Boeing delegated to Mitsubishi a big slice of the design work on the 787's wings.

Mike Siegel, Seattle Times

The sun sets over Nagoya, where the 787's wings are built.

Mike Siegel, Seattle Times

A huge autoclave — or high-pressure oven — inside Mitsubishi's plant, where the carbon-fiber-reinforced plastic wing parts are cured to hardness.

Mike Siegel, Seattle Times

Inspectors at Mitsubishi's plant in Nagoya check the fasteners that hold together the right-side wing of the first 787, due to arrive in Everett today together with its left-side complement.

Mike Siegel, Seattle Times

A tented container behind the Mitsubishi building, in which the completed wings are transported to a barge that then ferries them to the airport. From there, the wings fly to the U.S. on Boeing's Dreamlifter superfreighter.

Mike Siegel, Seattle Times

The Dreamlifter, carrying the wings, taxis to the delivery center in Everett.

Mike Siegel, Seattle Times

The first wings for the 787 Dreamliner arrive on the Dreamlifter early this morning in Everett from a Mitsubishi plant in Nagoya, Japan. The Dreamlifter splits open revealing the wings for the first 787 in the plane's cargo bay.

Mike Siegel, Seattle Times

The wings are being unloaded in Everett.

Mike Siegel, Seattle Times

Members of the delivery center crew celebrate as the wings clear the Dreamlifter and roll into the Dreamlifter Cargo Loader at dawn early Tuesday morning.

[Paul Ross]

You have misdiagnosed the situation, the problem at large in this market and your Rx is inapplicable. I.e., your proposed knee-jerk one-size-fits-all "cure" would not have done a thing here.

You were basically wrong. Let's get some fresh, actually credible points here.

To wit, as Boeing itself says:

The globalized 787 business model is meant to save money — not through cheap labor, but through sharing the up-front investment with others, he [industry analyst Richard Aboulafia] said.

Boeing's 787 partners carry big pieces of that burden. In return for the contracts to make huge 787 sections, they've invested billions of dollars, tapping whatever subsidies they can.

Japan's government provides loans estimated at up to $2 billion to the three Japanese partners. Italy provides regional infrastructure support to Alenia. In the U.S., South Carolina and Kansas provide financial incentives to Vought and Spirit AeroSystems, respectively.

"It's all about spreading the cost and the risk," Aboulafia said.

Bob Noble, the Boeing vice president responsible for global partners on new programs, said a partner's ability to invest, reducing Boeing's upfront costs, is "a big consideration" when deciding which companies participate.

But another big factor is finding the needed engineering talent and technical capacity.

"We have to be global," Noble said. "It's a whole world full of people's talents and capabilities we're bringing together to make this."

[Last Dakotan]

Good read, I noticed this part;

...But the top executives of the nation's aerospace industry, airlines and banks are bound by social ties and serve together on government-appointed industry bodies. The upshot is that Japanese airlines' jet orders complement the nation's manufacturing strategy.

Nobody does protectionism better than the Japanese. What's the manufacturing strategy of the US?

[Paul Ross]

Nobody does protectionism better than the Japanese.

The Chinese might have learned all they needed at their elbow...and can teach them more besides.

What's the manufacturing strategy of the US?

Going out of business sales.

[Last Dakotan]

Kill the unions...

You have a problem to the Right of Free Association?

Unions are a business, like any other. They sell organization and representation. My big problem is when people have to belong to them.

[Last Dakotan]

"It's all about spreading the cost and the risk," Aboulafia said.

It seems like Boeing's major interest is maximizing government subsidies around the world.

[Logophile]

Kill the unions, pass meaningful tort reform and watch the jobs come back because the cost of doing business in the US will drop like a rock.

Cutting taxes would help too.

[Spktyr]

Er, that was kind of my point. I should perhaps have better phrased it as “make the entire US a Right-To-Work zone, and make unions subject to racketeering laws like everyone else.”

[SeaHawkFan]

I have no problem with foreign government subsidizing an American company. I do have a problem with the US Government doing it.

[Last Dakotan]

“make the entire US a Right-To-Work zone, and make unions subject to racketeering laws like everyone else.”

Heartily agreed. Probably on my top five things the Republicans should have done in the majority. Gutless fools.

[pierrem15]

It's hard not to when their major competitor survives basically on government subsidies. It's also hard to keep jobs at home when national airlines demand a 'piece of the action' at home if you want the contracts.

Airbus has played this game for a long time. Boeing desn't have any choice.

[anymouse]

There was a time when America was the premier producer of advanced composite structures. Now, none of what is left of those companies even bear the same corporate name they did a mere 15 years ago. Good thing I decided not to hitch my career on my significant knowledge of advanced composite structure design.

[Ready4Freddy]

Ping for your aviation ping list.

[Paul Ross]

Pinging fyi

[Paul Ross]

Airbus has played this game for a long time. Boeing desn't have any choice.

Indeed, Airbus/EADS already had a 30% subsidy per plane (disguised as un-repaid "loans" which never have to be paid back) and which are likely going to seriously increase due to France's reaction to the collapsing economics of the A-380...they have promised to pour in still more billions rather than let their socialist enterprise immediately collapse due to lack of orders.

Another thinly veiled subsidy is the French / EADS industrial espionage and misappropriation of U.S. aviation and military technology for their commercial advantage. Nationally-backed piracy of U.S. intellectual property. All to attack our U.S. commerce.

Don't hear the phony free traders touting the "competition" of Airbus much anymore. They are still here. Just ducking because they know they have been busted.

[GOP_1900AD]

At least it’s Japan. We ought to license them to turn out nukes like sausages. Oh, but what am I thinking, that’s so non PC, so warmongerish ... ;)

[ALOHA RONNIE]

.

Thank you for the outstanding 787 heads up, PR.

I appreciate.

AR

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